Ausenco's result, as noted in last's weeks W&D, was in-line with expectations (ours and the market's). Please note that for Ausenco FY = CY. Trading conditions remain difficult for Ausenco, which resulted in a loss (and no dividend). North American operations were particularly challenged, because of the oil and gas market. The company delivered significant cost reductions over the year - $23.5m vs $23.0m planned. In conjunction with the prior year's cost reductions, the company's cost base has reduced considerably. This, combined with 2016 revenue forecast of $280 - $300m (vs $245.8m for FY-15), should result in a meaningful turnaround in earnings.
The strength of Ausenco's engineering offering remains - for instance, it regularly delivers capital and operating costs savings for clients of over 20%. It has significant leverage to improving conditions and additional contract awards. We consider the company to be attractively priced currently; so investors with patience should see the company's turnaround bear fruit.